Senate rejects revival of Grand Canyon U tax break

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News,Business,Taxes

PHOENIX (AP) — The Arizona Senate on Tuesday narrowly rejected an effort to revive a proposal granting a private Christian university a major break on its property taxes.

Grand Canyon University wants its property reclassified into a much lower rate that would save it about $750,000 a year on its Phoenix campus. Under the measure, any new construction at the school or at a planned Mesa campus also would be reclassified, meaning the tax break could expand greatly over time.

A Republican senator on Tuesday unsuccessfully tried to resurrect Senate Bill 1303, which the House Rules Committee rejected on April 2 because of concerns it ran afoul of constitutional requirements for uniform taxation and special legislation.

Sen. Steve Yarbrough, the bill's sponsor, tried to amend another tax measure, HB 2287, saying he had changed his proposal to address the constitutional concerns. He said he expanded it to potentially include some other private universities that hold regional accreditation.

"These would completely, absolutely remove any issue regarding constitutionality," Yarbrough said. Yarbrough has championed the bill, saying the university was bringing good-paying jobs to the area and deserved a tax break.

But Democrats said the bill would shift taxes to the lower-income homeowners who live near the university's campus. They also said changes could expand the proposal to include a raft of other universities and could hit the state's property owners with higher tax bills to make up the difference.

"This bill is a tax shift, it's a tax increase on homeowners that cannot afford the grave costs it is going to cause," said Sen. Ed Ableser, D-Tempe. "Do we want to raise taxes on good-old 80-year-old grandma who lives near Grand Canyon University?"

The Senate rejected Yarbrough's amendment on a 14-15 vote. He could try again to add the amendment to other bills now making their way through the Legislature in its final weeks of the session.

But Grand Canyon said Tuesday that its efforts are done for the year.

"We're not doing anything further to try to keep that bill alive during this legislative session," said Bob Romantic, the university's spokesman. "We're basically saying the legislators have spoken, and we're going to honor their wishes."

The university has poured hundreds of millions of dollars into expanding its campus at 35th Avenue and Camelback Road in recent years and plans to start construction on a $200 million Mesa facility this year. It also has been looking at property in Tucson for a third campus and is considering expanding outside Arizona.

But the expansion of the Phoenix campus came with sticker shock in the form of soaring property taxes.

A major Realtor group and the Arizona Tax Research Association opposed the bill because property tax cuts to one plot of land shifts those taxes to others.

Romantic previously said an estimate for increased taxes on other owners doesn't take into account the new construction on campus that increases the overall value of the property. That means even with the rate cut, the campus could pay even more in property taxes.

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